Will China ever get its pollution problem under control?

Earlier this year, when Beijing was choking on record levels of smog, observers wondered whether China would ever get its pollution problem under control. It's an insanely difficult question, with huge implications for everything from climate change to the global economy.

Cloudy forecasts. (AP)

So here's one stab at an answer, in the form of a big recent analysis (pdf) from three Deutsche Bank economists. The bad news: Most of China's current attempts to curb pollution are failing badly — the country is on pace for ever-higher levels of smog that could throttle the nation's economy and trigger out-of-control protests.

But there are reasons for optimism here, too: It's still technically possible for China to get a handle on its smog problem without abandoning economic growth. The country will just have to revamp its energy and transportation policies entirely. Starting... now.

Let's start with the gloom. China's air quality is already dismal, thanks to an ever-growing number of coal-fired power plants, factories and automobiles. The annual average levels of small particulate pollution, PM2.5, in cities is at 75 micrograms per cubic meter, three times as high as what the World Health Organization considers safe. (And that's an average — in January, Beijing's pollution levels soared past 900 µg/m3.)

And the future outlook isn't any better. The Deutsche Bank economists, Jun Ma, Audrey Shi and Michael Tong, take a look at China's current policies to curtail coal use, promote denser cities, and bolster mass transit. They found that these policies will still leave China with pollution that's 70 percent higher by 2025:

Among other things, the analysts don't believe that China's current and much-hyped pledge to restrict coal consumption to 3.9 billion tons by 2015 will actually work. "[T]his limit will likely be breached in as early as 2013, according to forecasts of many analysts. We see nothing in the current policy that could meaningfully slow down the pace of coal consumption," they write.

That's not good news for China. Higher levels of smog and particulate pollution have been linked to respiratory illnesses, strokes, heart attacks, and death. Anti-pollution protests are spreading across that country. One study from Peking University's School of Public health estimated that elevated levels of PM2.5 cost China some $1 billion over the past year. It's starting to put a dent in the country's economy.

"Under these pressures," the authors note, "we believe the government will have no choice but to take more drastic actions to fight air pollution."

So what will "more drastic actions" look like? Here are five big proposals from the report, summarized:

1) Reduce the annual growth in coal from its current rate of 4 percent to 2 percent. Coal use should peak by 2017. (Current projections have coal use peaking in the 2030s.)

2) Adopt scrubbers and other technologies that reduce conventional pollutants from coal-fired power plants 70 percent in the next 18 years. Similar technologies and better fuel efficiency can reduce emissions from vehicles by 80 percent over that time frame.

3) Increase the growth rate for lower-carbon energy technologies, from gas and nuclear to wind and hydro and solar power by 4 percentage points.

4) Slow the number of cars on the road — the 2030 target should be 250 million passenger cars, not the current 400 million.

5) More rails and subways. A lot more, in fact.

There's a lot more detail in the report, but the analysts estimate that if China does all this, it can reduce maximum annual average levels of PM2.5 down to about 35 micrograms per cubic meter by 2030. That's still higher than the World Health Organization's recommendations, and it's about twice as high as pollution levels in U.S. cities. But it would count as considerable progress.

So how hard would it be for China to revamp its energy and transportation policies? That's the good news: The Deutsche Bank authors estimate that the country could curtail coal use, clean up its energy supply, and still grow at an average of 6.8 percent per year between 2013 and 2030.

In particular, they argue that the United Kingdom went through an analogous structural shift in the 1950s after the "Great Smog" in London that killed 12,000 people. Britain had a similarly coal-dependent economy back then, but it managed to diversify its energy supply and clean up pollution without hurting growth:

So there's precedent, albeit on a smaller scale. The big hurdles for China aren't economic or technological, the authors say. They're political. Until now, China's policies to rein in pollution have largely been "piecemeal and uncoordinated." That will have to change.

Not everyone's completely convinced it will be so easy. Over at FT Alphaville, Kate Mackenzie is wary of the comparison with the United Kingdom. "I’d very much like this to be correct," she notes, "but I fear that Deutsche’s projections are a little too reliant on China emerging from its present dependence on capital intensive growth and manufacturing, becoming a more advanced, services-based economy."

Either way, this will remain one of the key environmental stories in the years ahead. If China can successfully curtail its coal use without crimping its economy, it makes climate change that much easier to deal with, for one. But that's still a big "if."